In early 2025, the Fair Work Commission handed down a decision that sent shockwaves through Australian workplaces. A Sydney office worker who refused a drug and alcohol test after a long lunch was awarded over $64,000 in compensation for unfair dismissal — not because drug testing is unreasonable, but because her employer got the process badly wrong.
The case of Tamati v MQT Pty Ltd is now essential reading for any organisation that conducts workplace drug and alcohol testing. Here is what happened, what went wrong, and what you need to do differently.
What Happened
The employee attended a lunch that extended to approximately four hours. Upon her return to the office, management directed her to undergo a drug and alcohol test. She refused, and was subsequently dismissed.
On the surface, this might seem straightforward — an employee refuses a lawful direction and faces the consequences. But the Fair Work Commission looked beneath the surface and found a series of procedural failures that rendered the dismissal unfair.
Where the Employer Went Wrong
1. Conflicting Reasons for the Test
This was perhaps the most damaging finding. Management initially told the employee that the test was a "random" drug and alcohol test. However, the justification later shifted to "post-incident and for cause" testing.
This inconsistency was fatal. If the test was truly random, the employee’s recent lunch should have been irrelevant — random means random. If it was for cause, the employer needed to articulate the specific concerns that triggered the test. By offering both justifications, management undermined both.
The Commission noted that the varying and conflicting reasons provided by managers created confusion about the true basis for the testing direction.
2. The Policy Was Not Provided
When the testing direction was given, the employee was not provided with a copy of the company’s drug and alcohol policy. This meant she could not understand her obligations, the testing procedure, or the consequences of refusal at the time the direction was made.
The Commission found this was a significant procedural failing. Employees cannot be expected to comply with a policy they have not been given access to in the moment.
3. No Investigation Before Dismissal
The company’s own handbook required a thorough examination of allegations before imposing sanctions. This step was skipped entirely. There was no investigation between the employee’s refusal and the decision to terminate her employment.
The Commission found that a proper investigation might have revealed mitigating circumstances or allowed for an alternative disciplinary response short of dismissal.
4. A Predetermined Outcome
Perhaps most critically, the Commission found that management had formed a predetermined view that the employee would either submit to the test or be dismissed. There was no genuine consideration of alternative outcomes or responses.
This approach — sometimes called a "test or be fired" ultimatum — is exactly the kind of rigid, procedurally unfair approach that tribunals consistently reject.
The Financial Cost
The employee was awarded over $64,000 in compensation. But the true cost to the employer extends far beyond this figure:
- Legal fees for the Commission proceedings
- Management time spent on the case
- Reputational damage — the case has been widely reported in HR and legal media
- A precedent that may embolden other employees to challenge poorly conducted tests
All of this could have been avoided with proper procedures.
What Your Organisation Should Do Differently
Be Clear About Why You Are Testing
Every test must have a clearly documented basis. If it is a random test, it should be generated through a genuinely random process — such as a random number generator or software like FairTest — and the employee should be told it is random. If it is for cause, document the specific observations or concerns that triggered it. Never mix the two.
Make Your Policy Accessible
Your drug and alcohol policy should be distributed to every employee, with signed acknowledgement kept on file. But accessibility does not stop at onboarding — managers should be able to produce the policy on the spot when directing an employee to test.
Follow Your Own Procedures
If your handbook says "investigate before imposing sanctions," then investigate. If your policy says "provide written allegations," then provide them. Courts and commissions will hold you to your own written standards, so make sure you can meet them.
Keep a Complete Audit Trail
Document the selection method, the notification, the employee’s response, and every subsequent step. If the matter ever reaches a tribunal, your documentation is your defence.
Consider Alternatives to Immediate Dismissal
A refusal to test is serious, but the Commission expects employers to consider the full range of disciplinary responses. Suspension pending investigation, a formal warning, or a directed second opportunity to test may all be appropriate depending on the circumstances.
The Broader Lesson
The Tamati case does not mean employers cannot test their workers. It means they must do it properly. The Fair Work Commission has consistently upheld dismissals where the employer had a clear policy, followed proper procedures, and treated the employee fairly throughout the process.
The difference between a defensible outcome and a $64,000 payout often comes down to preparation, consistency, and documentation — not the employee’s conduct.
If your organisation conducts random drug and alcohol testing, this case should prompt an immediate review of your policy, your procedures, and your record-keeping. The investment in getting it right is a fraction of the cost of getting it wrong.